private works pension ?

chrissysmagicbox

hi, i am now 64 and will be 65 in august, i am retired and receiving state pension and pension credit. i am due to receive my small works pension when 65 but do not know the best way to go. there are 2 options to get full pension of £s per annum or a tax free cash sum, plus what is called a residual scheme pension of so many £ s. i was hoping to pay off some debts and arrange a funeral plan. what i would like to know if i accepted the tax free lump sum would i not be able to get my state pension and pension credit. it is very likely to be under £8000 in all. please help me understand before i have to sign any documents. thanks chris

atush

It depends ont he level of your other savings and income. If you have no other savings and do have debt and you pay it off with the TF lump sum then that would be neutral. but you may no longer get the pension credit due to the new income you will be receiving. And we don't know the levels/amts so can't say.

So, i'd ask CAB or the DWP as to the rules and how they affect your position.

I would not count on the pension credit remaining if you have new income coming online. After all, this is meant to top up your pension if your income is low.

What you need to think abt is, will the new income keep you from going into debt in future if it is reduced so you can pay off the debt now?

tescobabe69

See an IFA, transfer your FS pension to a SIPP, draw 25% of the value, then do not draw any pension (from the SIPP), this will enable you to continue to draw pension credit, I think.

Bigmoney2

You will still be able to get your state pension.
Pension credit will depend on how much the company pension is.

Chris_P_2

tescobabe69 wrote: »

See an IFA, transfer your FS pension to a SIPP, draw 25% of the value, then do not draw any pension, this will enable you to continue to draw pension credit, I think.

Ridiculous!

1) who said it was FS?

2) why a sipp? plently of PPs offer drawdown

3)OP: As you would be contractually entitled to the work pension, the incoem (whether or not you actaully receive it) is taken into account for means testing.

RichandJ

Chris_P wrote: »

Ridiculous!

1) who said it was FS?

2) why a sipp? plently of PPs offer drawdown

3)OP: As you would be contractually entitled to the work pension, the incoem (whether or not you actaully receive it) is taken into account for means testing.

1) the terms the OP used, especially 'residual pension' suggest FS to me.

2) I've no opinion on where to transfer but as OP is within one year of what sounds like NRD, transfer may not be available anyway.

jamesd

Try the benefits board. I'm particularly concerned by your plan to pay off debt with the lump sum because in at least some of the deprivation of assets tests I've seen that would be classed as you deliberately depriving yourself of capital.

Your state pension won't be affected in any way, that's something you get as a right. It's the means tested pension credit that would be the possible issue.

Is the £8,000 the expected annual income, the lump sum, the total value of the pension pot or something else? Is this a final salary or similar income-related pension or one where you can pick the investments if you wanted to? How much income must you give up to get the lump sum?

What sort of income level do you expect including the state pensions and work pension and any other income that you may have? I'm asking because I want some idea of whether you will still be eligible for pension credit or will have an income that is too high for it to be a factor. An £8,000 a year income works pension plus state pensions would almost certainly mean no pension credit.

chrissysmagicbox

hi in answer to your questions, i am having a lump sum of £8000 plus a weekly amount of £26. i am on full mobility and lowest living allowance. thanks